The Finance Ministry has published a proposal for the amendment of real estate tax framework (legislative draft dated 14 June 2024 to amend the Agricultural Tax Act, the Local Taxes and Levies Act, the Forest Tax Act and the Stamp Duty Act).
The proposed law is supposed to introduce long-awaited changes in the taxation of real estate. There are new definitions of a building and of a structure after the Constitutional Court challenged the constitutionality of the old ones in mid 2023. In accordance with the proposal:
- A building is a built feature together with installations enabling it to be used as intended, which has been made using construction products and is permanently fixed to the ground and separated from the surrounding space by a building envelope, and has foundations and a roof, including where it is part of any of the features listed in items 1 to 6 of Schedule 4 to the act;
- A structure includes:
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- any of the features listed in Schedule 4 to the act, as well as any installation and equipment which forms a coherent whole with such a feature in terms of technology and use;
- construction parts of any equipment which is not part of a structure as above;
- construction parts of any wind turbines or nuclear power plants;
- foundations under plant or machinery if distinct from such plant or machinery in terms of engineering;
- connections to built features.
Both terms will now have meanings which are totally autonomous in relation to building law.
With the changes coming it will be advisable to review all your real properties in terms of the new regulations to redefine which of them are buildings and which are structures for real estate tax purposes. While there is still about half a year for that (the real estate tax returns for 2025 need to be filed by 31 Jan 2025), the ultimate wording of the new law is not established yet.
If this issue pertains to your business and you are interested in our assistance, please contact us.
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